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The Greek debt drama in 7 acts

How much money does the country owe, what options does it have to repay its loans, and what does this crisis mean for Greece, the European Union and the rest of the world?

A woman withdraws money from an ATM machine next to a beggar and a graffiti reading" No to fear" in Thessaloniki on July 6, 2015. More than 61 percent of Greek voters rejected fresh austerity demands by the country's EU-IMF creditors in a historic referendum, official results from over 95 percent of polling stations showed. (SAKIS MITROLIDIS / AFP/GETTY IMAGES)

Greece was hard-hit after the economic crisis of 2008. The International Monetary Fund, the European Central Bank and the European Commission – the so-called “troika” – offered a bailout package totaling €146 billion in 2010. Greece was given another €130 billion in 2012.

Greece imposed strict austerity measures in an effort to pay back these loans, including tax hikes and cuts to wages, pensions and public services. As a result, unemployment now sits at 26 per cent, and youth unemployment is nearly double that.

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The country still owes €240 billion, and Greece’s previous bailout line of credit expired June 30 before a deal could be reached for the last payout, The Associated Press reported.

According to Reuters, Greece’s inability to pay back €1.6 billion to the IMF was the largest missed payment in the fund’s history.

2. What happens if Greece defaults on its debt? Who will assume the bill?

This is the big question.

According to Karen Maley, a financial columnist at The Australian Financial Review, “European taxpayers should brace themselves” to accept that Greece may not pay back its loans, and may even be forced to contribute to another bailout.

The European Central Bank may also incur some of the debt, Maley said.

“The ECB holds almost €20 billion in Greek government bonds, while central banks in other eurozone countries hold a further €7 billion in Greek government bonds that the ECB would probably be obliged to buy in the event of a default.”

3. Is there any hope for a new economic package?

Greek Prime Minister Alexis Tsipras spoke to German Chancellor Angela Merkel by telephone Monday ahead of emergency meetings in Brussels on Tuesday with European leaders.

Merkel met with French President François Hollande Monday evening, and the meetings in Brussels Tuesday brought together leaders from the Eurozone, the shared, 19-member European monetary union.

But after Tsipras failed to present them with a detailed plan, the leaders reluctantly agreed to a final summit Sunday, the Associated Press reported. Tsipras said he would present a more detailed plan, with real figures to support his proposals, on Thursday.

4. How are Greeks coping?

Greece announced bank closures and withdrawal restrictions on June 28 and extended them through Wednesday, the AP reported.

A cash shortage is looming as Greeks and tourists drain ATMs, the wire service said.

If European leaders cannot come to an agreement with Greece, and the European Central Bank does not allocate emergency funds to keep Greek banks afloat, it may be forced to leave the Eurozone and issue its own currency – the drachma – again.

“As soon as anyone got new drachmas stuffed in their pockets, they would do whatever it takes to get rid of them,” Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics in Washington, told Bloomberg.

Canadian Finance Minister Joe Oliver said in a statement Sunday that Canada continues to monitor the situation closely. “We encourage the Greek government and its European partners to re-engage as quickly as possible to find a constructive resolution to this crisis,” Oliver said.

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